By: Scott Redler
As we head into a new month full with uncertainty, it is important to take a step back and evaluate the full body of action we have seen in recent weeks.
First the excitement of DOW 11,000 hit as the market reached our target from March in the 11,150-11,400 area. Then we put our traders on alert for a rounding top. Then came the bombshell with the Goldman news, at which point we decided at the very least it was time to lighten up. On Monday the DOW sliced through the uptrend, which got us looking for some potential shorting opportunities in the future after we worked off some of the oversold condition.
Right now, it’s a time to be neutral with an eye on a possible 5-9% correction. A daily close below 1179-1182 should trigger more fear and volatility. Stay prudent and prepared as we enter a new week and month.
